Success in Creative Real Estate

Be-Creative

Getting Experience with a New Investment Strategy.

I had a great chat with a graduate of my Deal-Ready Documents Focus Workshop. He had a closing scheduled, and so we met up to sign the paperwork.

He was pretty excited because this purchase was his first using the Agreement for Sale creative real estate investment strategy. As we worked our way through the documents my client said, “I’m sure glad to get this one done, my other three are going fine.” I shook my head a little bit and said, “didn’t you just tell me this was your first Agreement for Sale deal?”

His reply reminded me of investing truths that we all know but sometimes forget. “Yes,” he said, “this is the first deal I negotiated but it has taken a long time to actually complete.” Naturally, I couldn’t resist asking, “why is that, what was the problem?”

He gave me an answer that had a few parts. Here’s a paraphrase of what he said:

The sellers really needed to sell. They were underwater on their mortgage; they had to sell the house and no one was buying. They liked me, I liked them and it was a wonderful, classic win-win deal.

But, when they took it to their lawyer, he told them that I was a scammer, he didn’t like the deal, it was probably illegal, and he wasn’t going to act for them. They called me, reported what the lawyer said, told me they trusted me, and that they still wanted to do the deal. I referred them to a different lawyer who understands Agreements for Sale, who didn’t scare them. Instead, the new lawyer provided explanations, support, and let them make their own decisions. Now this long process is almost over and here’s what I’ve learned.

Make sure your seller uses a lawyer who understands and, more importantly, supports Agreements for Sale—or any other creative strategy you are using.

I’m a personable guy and I established a trusting relationship with my seller. They knew I was on their side and believed I was doing my best to turn their awful situation into a real win-win. When we hit a few bumps our relationship allowed us to overcome the problems.

This was my first Agreement for Sale deal and part of the problem was that I was still a little unsure about exactly how it would work. My offer to purchase and financing schedule were a bit unclear. My second deal was much better. By the time I wrote up the third and fourth it was like I’d been doing it all my life.

Lessons Learned:

  1. The ‘other’ lawyer is critical for creative real estate deal.
    Nothing kills a deal faster than a lawyer who scares the pants off his client with predictions of doom. Develop a list of real estate lawyers in your area who understand your strategy, give calm advice, and let their client assess the risk. Find a way to insist/ensure your other party use one of these lawyers.
  2. Real estate is a people business.
    Many of you will be dealing face-to-face without a realtor involved. Your deal-closing success percentage will rise dramatically once you understand and focus on understanding motivation and making sure the deal is a win-win. The result will be a trusting relationship that overcomes all bumps in the road.
  3. The first time takes more time.
    For any new strategy your first deal is scary, difficult, and often takes a while. Your second deal is 50% better. By the time you do your third deal, you will be comfortable with the technical process and much better able to focus on negotiations and relationship.

Understand and apply these three truisms
and watch your success rate go through the roof!

 

Buying or selling property in Alberta? Contact Barry now.

“Be creative” image by Ramdlon used under CC0 Public Domain.

Saving Tax on Investment Real Estate

Nobody likes to pay taxes. But not everyone knows strategies to make sure they only pay the minimum. My legal expertise could save you big money on the tax when you sell investment properties!

Check out this short interview I did in 2011. It was recorded when RMLO Law LLP was still called Ritchie Mill Law Office. #TBT #ThrowBackThurday

 

Buying or selling property in Alberta? Contact Barry now.

How Did You Get Started in Real Estate?

Focus on Real Estate: Quick Tips.

Ever wonder how a university student could become a real estate investor? This video gives a bit of Barry’s personal background. It explains how he purchased his very first rental property when he was just 22 years old!

This is the second instalment of Focus on Real Estate with Barry C. McGuire, a new series of videos that provides bite-sized pieces of investment wisdom.

Buying and/or selling real estate in Alberta? Barry can help. Contact him now!

Videos co-produced by the Real Estate Investment Network (REIN) as a Google Partner.

#1 Biggest Trick to Investing in Real Estate

Focus on Real Estate: Quick Tips.

Looking for quick tips on real estate investing? Focus on Real Estate with Barry C. McGuire is a new series of videos that provides bite-sized pieces of investment wisdom.

The first video tackles the biggest trick to real estate investing. The tip is simple: anyone can do it! Watch the video to find out why.

Buying and/or selling real estate in Alberta? Barry can help. Contact him now!

Videos co-produced by the Real Estate Investment Network (REIN) as a Google Partner.

Buying Property Without a Bank

HouseForSale

Podcast Episode 81:
Agreements for Sale 2.”

I introduced Agreements for Sale (AFS) in a previous blog post and podcast, and now it’s time to review with a bunch more examples. In essence, AFS is a type of seller financing and is sometimes called a bond for title or contract for deed. The seller retains the title, but the buyer takes control of the property—all without needing a bank. Nowadays, this technique is uncommon, but it used to be more popular during and immediately after the Great Depression. Take advantage of this little-known strategy to find great Creative Investing opportunities!

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as)

Continue reading

What is Rent-to-Own?

For Rent sign in front of a house.

Podcast Episode 80:
Rent-to-Own.”

Rent-to-Own (abbreviated as RTO and often interchangeably called a Lease-Option) is a two-part strategy. You start with a lease (the ‘Rent’ part) and add an option to purchase (the ‘Own’ part). In a Rent-to-Own scenario, the renter is, for some reason, unable to finance at the moment. Examples of financing problems are: bad credit, not enough down payment, self-employed, new job, or new immigrant. Yet, all these tenants want to make the transition toward home ownership immediately, usually for personal or emotional reasons.

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as)

Continue reading

Creative Investing

Buying Real Estate

Podcast Episode 79:
Creative Real Estate Strategies.”

What is Creative Real Estate Investing? It is a method for making money with real estate that uses strategies like Rent-to-Own, Agreements for Sale, and Wholesaling, among others. This is an area not too many people know about, but it offers some tremendous opportunities. One of the things that differentiates Creative Real Estate Investment from the traditional Buy & Hold approach is that it works on a much shorter timeline.

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as)

Continue reading

Assignments: Clever Investment Strategy or Malicious Shadow Flipping?

HandShake-450pix

Happy Canada Day!

Podcast Episode 78:
“Contract Assignments.”

The practice of selling one’s interest in a real estate purchase contract—a.k.a. an assignment—has been getting a lot of bad press in BC lately. In fact, the situation there may be changing thanks to government intervention. Contract assignments are a widely used and entirely legal procedure, but the laws governing them vary by location. We’re discussing BC, and then focusing on Alberta here. As always, the principles I explain are widely applicable—as long as you consult your local regulations.

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as)

Continue reading

Title Insurance

HomeInsurance

Podcast Episode 77:
Is Title Insurance Worth It?

In Western Canada, title insurance was created to cover problems with real property reports, but did you know that it also covers many other issues? In this Tale, we have a case where the lender got title insurance, but the buyer/homeowner did not. When there was a $21,000 claim made regarding gap registration, the matter went to court. This problem could have been avoided with a mere $50 of extra insurance! Many of the Tales I tell are like this one, which is all about helping you avoid other people’s mistakes.

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as)

Continue reading